Subros Ltd Secures ₹52 Cr Indian Railways Order, Expands into Lucrative Service Contracts!

Subros Lands Major Maintenance Contract with Indian Railways

Subros Limited has announced a substantial new order valued at approximately ₹52.18 crore from Indian Railways' Banaras Locomotive Works (BLW) in Varanasi. The contract involves the comprehensive annual maintenance of air-conditioning (HVAC) units installed in locomotive driver cabins.

Key Contract Details

• The agreement with Indian Railways spans a duration of three years, ensuring a steady revenue stream for Subros.
• This order specifically covers the maintenance of crucial air-conditioning systems designed for locomotive driver cabins.
• It represents a significant expansion for Subros into the service and maintenance sector, a new vertical for the company.

Expansion into Service Contracts

Historically known as a manufacturer of thermal products for the automotive sector, Subros is strategically diversifying its business model. This new contract signifies the company's successful foray into providing comprehensive service contracts, moving beyond just manufacturing and supply.

• Subros has been a regular supplier of Rail Driver Cabin & Coach Air-Conditioning Systems to Indian Railways.
• The addition of this maintenance contract allows the company to tap into the growing service revenue opportunities within the railway sector.

Financial Performance Snapshot

The announcement comes alongside Subros's recent financial results for the September 2025 quarter:

• Net Profit: The company reported an 11.8% year-on-year increase in net profit, reaching ₹40.7 crore, up from ₹36.4 crore in the same period last year.
• Revenue: Revenue saw a 6.2% year-on-year rise, standing at ₹879.8 crore, compared to ₹828.3 crore in the prior year's quarter.
• EBITDA and Margins: EBITDA experienced a decline of 10.1% to ₹68.4 crore from ₹76.1 crore, and the operating margin stood at 7.7%, down from 9.2% a year ago.

Stock Performance

Shares of Subros Ltd were trading marginally down by 0.11% at ₹876.05 on Thursday afternoon. Despite the slight intraday dip, the stock has shown strong momentum over the past six months, surging by 16.78%.

Impact

• This new order provides Subros with a substantial, multi-year revenue stream, enhancing its financial stability and predictability.
• The diversification into service contracts reduces reliance on manufacturing alone and opens up new avenues for growth and profitability.
• For Indian Railways, this contract ensures the continued optimal functioning of critical HVAC systems in locomotives, vital for driver comfort and operational efficiency.
• The expansion into services could improve overall margins and profitability for Subros in the long run, potentially boosting investor confidence.
• Impact Rating: 7/10

Difficult Terms Explained

• HVAC: Stands for Heating, Ventilation, and Air Conditioning. It refers to systems that control the temperature and air quality within a space, such as a locomotive driver's cabin.
• EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance before accounting for financing and accounting decisions.
• Operating Margin: A profitability ratio that measures how much profit is generated from revenue after accounting for variable costs of production. It is calculated as Operating Income / Revenue.
• Order Book: The total value of contracts secured by a company that have not yet been fulfilled. It provides an indication of future revenue.